Daqo New Energy (688303.SH): Q3 2025 Review – A Strategic Inflection Point Marked by Significant Loss Reduction and Cost Optimization

Date: October 2025
Analyst: Zhong Xincai, Liu Qiang
Source: Pacific Securities Research Institute

Executive Summary

Daqo New Energy (688303.SH), a leading global manufacturer of high-purity polysilicon, has released its third-quarter financial report for 2025, signaling a pivotal turnaround in its operational and financial trajectory. The company reported a net profit attributable to shareholders of RMB 74 million in Q3 2025, marking a successful return to profitability after a period of significant losses. This achievement was driven by a confluence of favorable industry dynamics—specifically the cessation of "involutionary" price wars through industry self-discipline—and robust internal cost optimization measures.

In Q3 2025, Daqo achieved revenue of RMB 1.773 billion, representing a year-on-year increase of 24.75% and a substantial quarter-on-quarter surge of 214.93%. For the first nine months of 2025, total revenue stood at RMB 3.243 billion, down 46.00% year-on-year, with a cumulative net loss of RMB 1.073 billion. However, the sequential improvement in Q3 underscores the effectiveness of the company’s strategic adjustments and the broader market recovery.

The core investment thesis for Daqo New Energy rests on three pillars:
1. Operational Resilience & Cost Leadership: The company demonstrated exceptional cost control, reducing its unit cash cost to RMB 34.63/kg in Q3, well below the prevailing market prices, thereby securing positive gross margins despite earlier industry-wide pressure.
2. Industry Supply-Demand Rebalancing: The ongoing industry-wide initiative to curb excessive competition ("anti-involution") and expectations of state-led inventory reserves have catalyzed a recovery in polysilicon prices. Polysilicon prices rose significantly in Q3, accelerating destocking across the supply chain and improving pricing power for tier-1 manufacturers.
3. Robust Balance Sheet: With an asset-liability ratio of merely 8.20% and cash reserves exceeding RMB 13 billion, Daqo possesses one of the strongest balance sheets in the sector. This financial fortitude provides a critical buffer against market volatility and positions the company to capitalize on future consolidation opportunities or technological upgrades without the burden of excessive leverage.

We initiate coverage of Daqo New Energy with a "BUY" rating. We project the company’s revenue to reach RMB 4.81 billion, RMB 7.29 billion, and RMB 9.29 billion in 2025, 2026, and 2027, respectively. Corresponding net profits are forecasted at -RMB 997 million, RMB 1.057 billion, and RMB 2.123 billion. The anticipated recovery in polysilicon pricing, coupled with Daqo’s cost advantages and premium customer structure, supports a compelling risk-reward profile for institutional investors seeking exposure to the photovoltaic (PV) upstream sector’s recovery phase.

Key Takeaways

1. Financial Performance: Q3 Turnaround and Sequential Momentum

The third quarter of 2025 represents a definitive turning point for Daqo New Energy. After navigating a challenging first half characterized by depressed polysilicon prices and inventory write-downs, the company successfully pivoted to profitability in Q3.

Revenue and Profitability Analysis

• Q3 2025 Revenue: RMB 1.773 billion.
  • Year-on-Year (YoY): +24.75%. This growth is particularly notable given the deflationary environment in the PV sector over the past year, indicating volume-driven expansion and price stabilization.
  • Quarter-on-Quarter (QoQ): +214.93%. This dramatic sequential increase highlights the rapid acceleration in both sales volume and average selling prices (ASP).
• Q3 2025 Net Profit: RMB 74 million.
  • The company swung from a loss position in previous quarters to a net profit in Q3. This turnaround was not solely driven by top-line growth but also by significant improvements in gross margins and the reversal of previously accrued inventory impairment provisions.
• 9M 2025 Aggregate Performance:
  • Revenue: RMB 3.243 billion (-46.00% YoY). The decline reflects the severe price compression experienced in H1 2025, where polysilicon prices fell below the cash costs of many producers.
  • Net Profit: -RMB 1.073 billion. While the cumulative figure remains negative, the Q3 performance suggests that the trough has passed, and the trajectory for H2 2025 and beyond is markedly improved.

Source: Company Reports, Pacific Securities Research

The divergence between the weak 9M aggregate results and the strong Q3 standalone performance underscores the dynamic nature of the polysilicon market. The heavy losses incurred in H1 were largely due to non-cash accounting charges (inventory impairments) and prices that temporarily dipped below sustainable levels. The Q3 recovery validates the resilience of Daqo’s business model and its ability to adapt to volatile market conditions.

Volume Dynamics: Production and Sales Surge

A key driver of the Q3 revenue beat was the substantial increase in sales volume.
* Sales Volume: 42,400 tonnes in Q3, a QoQ increase of 133.95%.
* Production Volume: 30,600 tonnes in Q3, a QoQ increase of 17.83%.

The disparity between production and sales volumes (sales > production) indicates aggressive destocking. Daqo actively reduced its inventory levels by selling previously produced stock, which aligns with the broader industry trend of clearing excess inventory as prices began to stabilize and rise. This destocking effort was crucial in alleviating balance sheet pressure and improving cash flow conversion. The ability to sell 42,400 tonnes in a single quarter demonstrates strong demand from downstream wafer manufacturers, who accelerated procurement in anticipation of further price hikes.

2. Operational Efficiency: Cost Optimization and Pricing Power

Daqo New Energy has long been recognized for its low-cost production capabilities, and Q3 2025 further cemented this competitive advantage. In an industry where marginal costs determine survival during downturns, Daqo’s ability to maintain industry-leading cost structures is a primary investment merit.

Pricing Trends and Margin Recovery

• Average Selling Price (ASP): In Q3 2025, Daqo’s tax-exclusive polysilicon ASP reached RMB 41.49/kg.
  • This represents a QoQ increase of 36.80%.
  • The price recovery began in June 2025, driven by industry-wide production cuts and the "anti-involution" consensus among major players. The upward trajectory continued through September, allowing Daqo to capture higher margins on every kilogram sold compared to H1.
• Cost Structure:
  • Unit Total Cost: RMB 46.04/kg in Q3.
  • Unit Cash Cost: RMB 34.63/kg in Q3.
  • Margin Analysis: With an ASP of RMB 41.49/kg and a cash cost of RMB 34.63/kg, Daqo generated a positive cash margin of approximately RMB 6.86/kg. While the total unit cost (including depreciation and amortization) was slightly higher than the ASP, resulting in a narrow accounting margin, the positive cash flow generation is critical. It ensures operational sustainability and funds ongoing maintenance and minor efficiency upgrades without requiring external financing.
  • Trend: Both total and cash costs showed continuous optimization QoQ. This reduction is attributed to higher capacity utilization rates (spreading fixed costs over larger volumes), technological refinements in the Siemens process, and lower input costs for energy and raw materials.

Inventory Impairment Reversal

A significant contributor to the Q3 net profit was the reversal of inventory impairment provisions. According to the company’s October Investor Relations Activity Record, previously accrued provisions for inventory write-downs were reversed or written off in Q3.
* Mechanism: In H1 2025, when polysilicon prices plummeted below cost, Daqo prudently wrote down the value of its inventory, impacting H1 profits heavily. As prices recovered in Q3 to levels above the written-down value (or closer to historical cost), accounting standards allowed for the reversal of these provisions, boosting current-period earnings.
* Implication: This is a non-cash gain that improves reported net income but does not directly enhance operating cash flow. However, it signals that the worst of the inventory devaluation risk has passed. Future quarters are likely to reflect more normalized earnings based on actual operating margins rather than large accounting adjustments.

3. Industry Context: The End of "Involution" and Supply Discipline

The polysilicon sector in China has undergone a brutal period of overcapacity and price wars, often referred to as "involution" (neijuan). Q3 2025 marked a structural shift in this narrative, driven by two main factors: industry self-discipline and policy expectations.

Industry Self-Discipline and Production Cuts

Major polysilicon producers, including Daqo, GCL Technology, Tongwei, and Xinte Energy, have collectively moved towards production rationalization.
* Capacity Utilization Adjustment: Leading firms voluntarily reduced operating rates to align supply with demand. This coordinated effort helped halt the freefall in prices.
* Price Floor Establishment: The industry effectively established a price floor near the cash cost of high-cost producers. By sustaining prices above this level, tier-1 players like Daqo could remain cash-flow positive while forcing higher-cost, less efficient competitors to exit or curtail production.
* Impact on Daqo: As a low-cost producer, Daqo benefits disproportionately from this stabilization. It can maintain higher utilization rates than peers while still generating positive margins, thereby gaining market share during the consolidation phase.

Policy Expectations: State Reserve Mechanisms

Market sentiment in Q3 was further bolstered by rumors and expectations of government-led polysilicon reserves.
* Strategic Stockpiling: Speculation that the Chinese government might initiate strategic reserves of key PV materials to stabilize prices and support the domestic manufacturing base led to accelerated restocking by downstream buyers.
* Psychological Impact: The expectation of state intervention created a "buying frenzy" among wafer and cell manufacturers, who feared missing out on potential price increases. This behavioral shift accelerated the destocking process for polysilicon producers and tightened immediate supply availability.

Downstream Demand Resilience

Despite global trade tensions and tariff uncertainties, global PV installation demand remains robust.
* Restocking Cycle: Downstream clients, having operated with lean inventories during the price decline, entered a restocking phase in Q3. This coincided with the peak season for PV installations in China and Europe, driving incremental demand.
* Technology Transition: The continued shift towards N-type cells (TOPCon and HJT) requires higher-quality polysilicon (N-type grade). Daqo’s product mix is heavily skewed towards high-purity N-type material, which commands a premium and faces tighter supply constraints compared to standard P-grade polysilicon. This structural demand shift favors Daqo’s product portfolio.

4. Financial Health: Fortress Balance Sheet

In a capital-intensive industry prone to cyclical downturns, balance sheet strength is a decisive competitive advantage. Daqo New Energy stands out for its exceptionally conservative financial structure.

Liquidity and Cash Reserves

• Cash Position: As of the end of Q3 2025, Daqo held cash reserves totaling RMB 13.012 billion. This includes cash on hand, time deposits, structured deposits, and bank acceptance bills.
• Significance: This massive cash pile provides several strategic options:
  1. Survival Buffer: It allows the company to withstand prolonged periods of low prices without risking insolvency or needing distress financing.
  2. Investment Flexibility: Daqo can fund necessary technological upgrades (e.g., energy efficiency improvements, automation) internally.
  3. M&A Potential: In a consolidating market, Daqo has the firepower to acquire distressed assets or competitors if valuations become attractive, although management has historically prioritized organic growth and shareholder returns.
  4. Shareholder Returns: The strong cash position supports potential dividend payments or share buybacks, enhancing total return for investors.

Leverage Metrics

• Asset-Liability Ratio: 8.20%.
  • This is remarkably low for a manufacturing firm, especially in the PV sector where leverage ratios often exceed 50-60%.
  • Zero Interest-Bearing Debt: The balance sheet data indicates zero short-term and long-term borrowings. This absence of debt eliminates interest expense risks and refinancing risks, making Daqo immune to rising interest rate environments.
• Working Capital Management: The reduction in inventory levels (from RMB 1.196 billion in 2024 to an estimated RMB 953 million in 2025E) improves working capital efficiency. The company is converting inventory to cash more rapidly, further strengthening its liquidity position.

Source: Company Reports, Pacific Securities Research Estimates

The trend shows a deliberate deleveraging and cash preservation strategy over the past two years. While monetary funds decreased from 2023 to 2024 due to CAPEX and operational losses, the projected increase in 2026-2027 reflects the expected return to profitability and positive operating cash flows.

5. Valuation and Investment Rating

Based on the improved outlook for polysilicon prices and Daqo’s cost leadership, we revise our earnings forecasts and initiate coverage with a BUY rating.

Earnings Forecasts (2025-2027)

We project a V-shaped recovery in earnings, with 2025 remaining slightly negative due to H1 losses, followed by strong profitability in 2026 and 2027.

Note: PE ratios are calculated based on the closing price of RMB 30.71. EPS is diluted based on the latest total share capital of 2.145 billion shares.

Key Assumptions:
1. Polysilicon Price: We assume ASPs stabilize in the RMB 40-50/kg range in 2026 and gradually increase to RMB 50-60/kg by 2027 as supply-demand balances tighten.
2. Volume Growth: Sales volumes are expected to grow in line with global PV installation growth, estimated at 15-20% CAGR. Daqo’s market share is assumed to remain stable or slightly increase due to its cost advantage.
3. Cost Stability: Unit cash costs are expected to remain flat or decrease slightly due to efficiency gains, maintaining Daqo’s position in the lowest quartile of the global cost curve.
4. No Major CAPEX Expansion: We assume limited new greenfield capacity additions, focusing instead on optimizing existing assets. This caps depreciation growth and supports margin expansion.

Valuation Methodology

We employ a combination of Price-to-Earnings (PE) and Price-to-Book (PB) valuation methods, given the cyclical nature of the industry.

• PE Valuation: For 2026, we assign a target PE of 25-30x, which is consistent with historical averages for leading PV material companies during recovery phases. Applying a 25x multiple to the 2026 EPS of RMB 0.49 yields a target price of ~RMB 12.25. However, this seems conservative given the strong balance sheet. A more appropriate peer comparison might suggest a higher multiple due to Daqo’s superior cash position.
• PB Valuation: Given the asset-heavy nature and the significant cash buffer, PB is a relevant metric. Daqo currently trades at ~1.68x 2025E PB. Historically, high-quality PV leaders have traded at 2.0-3.0x PB during upcycles. Applying a 2.0x PB to the 2026E Book Value per Share (approx. RMB 18.75) suggests a target price of ~RMB 37.50.
• Sum-of-the-Parts (SOTP): Considering the net cash position of ~RMB 13 billion (approx. RMB 6.06 per share), the enterprise value is significantly lower than the market cap. The market is essentially valuing the operating business at a modest multiple while assigning significant value to the cash hoard.

Target Price: We set a target price range of RMB 35.00 - RMB 38.00, implying an upside potential of 15-25% from the current level of RMB 30.71. This reflects the premium for financial safety and the anticipated earnings recovery in 2026.

Rating: BUY. The risk-reward ratio is favorable. The downside is limited by the substantial cash backing (floor value), while the upside is driven by operational leverage as prices recover.

Risks / Headwinds

While the outlook is positive, investors must consider several structural and cyclical risks associated with Daqo New Energy and the broader PV sector.

1. Downstream Demand Volatility

• Global Installation Slowdown: If global PV installation growth falls short of expectations due to macroeconomic headwinds, high interest rates, or grid connection bottlenecks, demand for polysilicon will weaken.
• Policy Changes: Subsidy reductions or policy shifts in key markets (China, Europe, USA, India) could dampen demand. For instance, changes in the US Inflation Reduction Act (IRA) or European Green Deal implementation could alter trade flows and demand patterns.
• Seasonality: PV demand is often seasonal, with stronger installations in H2. Any disruption in H2 2025 or H1 2026 could delay the expected revenue recovery.

2. Raw Material and Energy Price Fluctuations

• Energy Costs: Polysilicon production is energy-intensive, particularly electricity. Increases in industrial electricity prices in Xinjiang (where Daqo’s main facilities are located) would directly impact cash costs. While Daqo has long-term power agreements, regulatory changes in power pricing could pose a risk.
• Silicon Metal Prices: The cost of silicon metal, the primary raw material, is subject to market fluctuations. A sharp rise in silicon metal prices could compress margins if polysilicon prices do not adjust accordingly.

3. Intensifying Market Competition

• New Capacity Ramp-up: Despite current discipline, several competitors have announced or are building new capacity. If these projects come online faster than expected in 2026-2027, it could lead to renewed oversupply and price pressure.
• Technological Disruption: The emergence of alternative materials or processes (e.g., fluidized bed reactor (FBR) polysilicon gaining wider acceptance, or breakthroughs in thin-film technologies) could challenge the dominance of the Siemens process used by Daqo. While unlikely in the short term, long-term technological shifts pose a strategic risk.
• Price Wars Resumption: If industry self-discipline breaks down and competitors engage in aggressive price cutting to gain market share, Daqo’s margins could be eroded. Although Daqo is a low-cost producer, sustained prices below RMB 40/kg would pressure profitability.

4. Policy and Regulatory Risks

• Trade Barriers: Increasing protectionism in international markets (e.g., anti-dumping duties, tariffs, or supply chain exclusions) could limit Daqo’s export opportunities. While Daqo primarily serves the domestic Chinese market, indirect exports via module makers could be affected.
• Environmental Regulations: Stricter environmental standards regarding carbon emissions or waste disposal could increase compliance costs. Daqo has invested in green energy, but regulatory tightening remains a potential headwind.
• Geopolitical Tensions: Escalating geopolitical tensions involving China could lead to supply chain decoupling efforts, affecting the global PV supply chain dynamics.

5. Financial and Operational Risks

• Inventory Valuation: While the Q3 reversal was positive, future price declines could necessitate further write-downs. The accuracy of inventory valuation depends on stable market prices.
• CAPEX Execution: Any delays or cost overruns in planned maintenance or upgrade projects could impact production efficiency and costs.
• Foreign Exchange Risk: Although Daqo’s revenues are primarily in RMB, any exposure to foreign currency transactions (e.g., equipment imports) could result in exchange rate losses.

Rating / Sector Outlook

Sector Outlook: Cautiously Optimistic with Structural Consolidation

The polysilicon sector is transitioning from a phase of chaotic overcapacity to one of structured consolidation. The "anti-involution" drive is not merely a temporary tactic but a necessary evolution for the industry’s long-term health.

• Supply Side: We expect supply growth to moderate significantly in 2026 as high-cost producers exit or idle capacity. Tier-1 players like Daqo will consolidate market share.
• Demand Side: Global PV demand remains structurally strong, supported by the energy transition goals of major economies. The long-term CAGR for PV installations is expected to remain in the double digits.
• Pricing: Polysilicon prices are expected to stabilize at a level that allows efficient producers to earn a reasonable return on invested capital (ROIC) while discouraging new, inefficient entry. We forecast ASPs to hover in the RMB 45-55/kg range in 2026, providing a healthy margin environment for Daqo.

Sector Rating: Overweight. The worst of the cycle is behind us. Investors should favor companies with strong balance sheets, low costs, and technological leadership.

Company Rating: BUY

Daqo New Energy is best positioned to navigate the current cycle and thrive in the next upcycle. Its combination of cost leadership, financial strength, and product quality makes it a top pick in the upstream PV sector.

• Catalysts for Upside:

  1. Further confirmation of polysilicon price stability or increases in Q4 2025 and Q1 2026.
  2. Announcement of dividend payments or share buybacks, leveraging the strong cash position.
  3. Better-than-expected destocking speeds in the downstream supply chain.
  4. Potential M&A activity or strategic partnerships that enhance market position.

• Valuation Appeal: At current levels, the stock offers a compelling entry point. The market has priced in significant pessimism, ignoring the value of the cash hoard and the inevitability of earnings recovery. As profitability returns in 2026, re-rating is likely.

Investment View

Strategic Imperative: Quality Over Quantity

In the post-involution era of the PV industry, investment strategies must shift from betting on pure capacity expansion to selecting companies with sustainable competitive advantages. Daqo New Energy exemplifies this quality profile.

1. The "Cash King" Advantage

Daqo’s RMB 13 billion cash reserve is not just a safety net; it is a strategic weapon. In an industry where many peers are struggling with debt servicing and liquidity crunches, Daqo can:
* Maintain R&D Spending: Continue investing in next-generation polysilicon technologies and process improvements without financial strain.
* Weather Storms: Operate through extended periods of low prices without compromising operational integrity.
* Capture Opportunities: Acquire distressed assets or technology licenses at bargain prices if the consolidation phase accelerates.

For institutional investors, this financial resilience reduces the downside risk significantly. The probability of equity dilution through emergency fundraising is near zero, protecting shareholder value.

2. Cost Curve Leadership

Daqo’s unit cash cost of RMB 34.63/kg places it firmly in the first quartile of the global cost curve. This structural advantage ensures that:
* Profitability is Robust: Even if prices fall to RMB 40/kg, Daqo remains cash-flow positive.
* Market Share Gains: During price wars, Daqo can afford to sell at prices that force higher-cost competitors out of the market, thereby increasing its long-term market share.
* Premium Product Mix: Daqo’s focus on N-type polysilicon allows it to capture a price premium, further widening the gap between its realized ASP and its costs.

3. Alignment with Industry Trends

The industry’s move towards self-discipline aligns perfectly with Daqo’s operational philosophy. The company has historically avoided reckless expansion, preferring steady, efficient growth. This prudent approach is now being rewarded as the market penalizes over-leveraged, high-cost producers.

4. Long-Term Energy Transition Play

Beyond the cyclical dynamics, Daqo is a pure play on the global energy transition. As solar power becomes the cheapest source of electricity in many regions, demand for polysilicon will continue to grow structurally. Daqo’s high-purity product is essential for the high-efficiency modules that dominate the modern market. Investing in Daqo is an investment in the foundational material of the solar economy.

Actionable Recommendations for Institutional Investors

1. Accumulate on Weakness: Given the volatility in the PV sector, any short-term pullbacks in Daqo’s stock price due to broader market sentiment or transient news should be viewed as buying opportunities. The fundamental trajectory is upward.
2. Monitor Quarterly Margins: Closely track the spread between ASP and unit cash cost in upcoming quarterly reports. A widening spread confirms the recovery thesis.
3. Watch Inventory Levels: Continued destocking is positive. However, if inventory levels start rising again without a corresponding increase in sales, it may signal demand weakness.
4. Dividend Expectations: Investors should engage with management regarding capital allocation policies. Given the excess cash, a initiation of a regular dividend or a special dividend would be a strong positive catalyst for the stock.

Conclusion

Daqo New Energy’s Q3 2025 results mark the end of the painful adjustment phase for the company and the polysilicon sector. The return to profitability, driven by price recovery and cost optimization, validates the company’s resilient business model. With a fortress balance sheet, industry-leading costs, and a favorable industry backdrop, Daqo is well-positioned to deliver superior returns in the coming years.

We reaffirm our BUY rating with a target price range of RMB 35.00 - RMB 38.00. Institutional investors seeking exposure to the PV sector’s recovery should consider Daqo New Energy as a core holding, offering a unique combination of safety (cash) and growth (earnings recovery).

Appendix: Detailed Financial Analysis

Income Statement Trends

The income statement reveals the dramatic swing in profitability.

• Gross Margin Recovery: In H1 2025, gross margins were severely compressed, even turning negative in some months due to prices falling below total costs. In Q3, the gross margin improved significantly as ASPs rose above cash costs. We project gross margins to expand to ~20% in 2026 and ~29% in 2027 as prices normalize and volumes grow.
• Operating Expenses: Selling, general, and administrative expenses (SG&A) have been well-controlled. The company benefits from economies of scale, keeping SG&A as a percentage of revenue low. Financial expenses are negligible due to the lack of debt, and interest income from cash deposits provides a small positive contribution.
• Taxation: The company’s effective tax rate is influenced by preferential tax policies in Xinjiang. As profitability returns, tax expenses will increase, but the net impact remains favorable compared to peers in higher-tax jurisdictions.

Cash Flow Analysis

• Operating Cash Flow (OCF): OCF turned positive in Q3, driven by improved profitability and working capital management (destocking). We project strong OCF generation in 2026 and 2027, supporting potential dividends and reinvestment.
• Investing Cash Flow: Capital expenditures have moderated as the major expansion phase is complete. Future CAPEX will be focused on maintenance and efficiency upgrades, resulting in lower cash outflows compared to previous years.
• Financing Cash Flow: With no debt repayments or new issuances, financing cash flow is minimal. This simplicity enhances the predictability of the company’s cash position.

Balance Sheet Strengths

• Current Ratio: The current ratio is extremely high, indicating ample liquidity to meet short-term obligations.
• Return on Equity (ROE): ROE was negative in 2024 and 2025E due to losses. However, we project ROE to recover to 2.63% in 2026 and 5.05% in 2027. While these figures may seem modest, they represent a significant improvement from the trough and are supported by a low equity base relative to cash holdings. As net profits grow, ROE will expand further.
• Return on Invested Capital (ROIC): Similar to ROE, ROIC is expected to recover, reflecting the efficient use of the company’s substantial asset base.

Sensitivity Analysis

To illustrate the investment case, we provide a sensitivity analysis of the target price based on key variables:

Assumptions: Constant sales volume of ~150,000 tonnes in 2026. PE multiple of 25x applied to 2026 EPS.

The Base Case aligns with our current forecast. The Bull Case assumes a stronger-than-expected price recovery, while the Bear Case assumes prolonged price suppression. Even in the Bear Case, the downside is limited by the cash value per share (~RMB 6.06), suggesting a floor price significantly above zero.

Final Thoughts

Daqo New Energy represents a classic "turnaround" investment opportunity in a strategic industry. The convergence of industry discipline, cost leadership, and financial strength creates a compelling narrative for long-term value creation. Institutional investors are advised to position themselves ahead of the full realization of the 2026 earnings recovery.

Disclaimer: This report is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence and consult with financial advisors before making investment decisions. The views expressed herein are subject to change without notice. Pacific Securities and its affiliates may hold positions in the securities mentioned in this report.